Article #4 – Discrimination damages versus workers compensation benefits
Published on August 12, 2021 by Hanaan Indari and Thomas Felizzi
In this series of articles, Thomas Felizzi from our Compensation Law Team looks at Psychological and Psychiatric injuries in Workers Compensation including:
- What constitutes a psychological injury?
- Is a psychiatric injury a disease, a personal injury or both?
- What are the defences against a claim of psychiatric injury?
- Discrimination damages versus workers compensation benefits
In this fourth article of the series, Thomas looks at discrimination damages versus workers compensation benefits.
Discrimination damages versus workers compensation benefits
Often the jurisdiction of workers compensation psychiatric injuries cases overlaps with that of discrimination law.
It is important to consider section 149 and 151 of the 1987 Act.
Both those sections operate to remove an entitlement to workers compensation (statutory entitlements and modified common-law entitlements, the latter of which had not been discussed today) if the applicant worker has already recovered damages in respect of the same injury.
Section 151A of the 1987 Act provides:
151A Effect of recovery of damages on compensation
If a person recovers damages in respect of an injury from the employer liable to pay compensation under this Act then (except to the extent that subsection (2), (3), (4) or (5) covers the case)—
The person ceases to be entitled to any further compensation under this Act in respect of the injury concerned (including compensation claimed but not yet paid), and
The amount of any weekly payments of compensation already paid in respect of the injury concerned is to be deducted from the damages (awarded or otherwise paid as a lump sum) and is to be paid to the person who paid the compensation, and
The person ceases to be entitled to participate in any injury management program provided for under this Act or the 1998 Act.
If damages in respect of an injury are recovered from the employer liable to pay compensation under this Act, pursuant to a cause of action that survives for the benefit of the estate of a deceased worker under the Law Reform (Miscellaneous Provisions) Act 1944 , the following amounts of compensation are to be repaid out of the estate of the deceased worker to the person who paid the compensation—
The amount of any weekly payments of compensation already paid in respect of the injury concerned,
The amount of any permanent impairment compensation and pain and suffering compensation already paid in respect of the injury concerned.
If damages are recovered in an action under the Compensation to Relatives Act 1897in respect of the death of a worker from the employer liable to pay compensation under this Act in respect of the death.
The amount of any compensation under Division 1 of Part 3 paid in respect of the death is to be deducted from the damages (awarded or otherwise paid as a lump sum) and is to be paid to the person who paid the compensation, and
A person recovering those damages ceases to be entitled to any further compensation under this Act in respect of the death of the worker.
If a person recovers motor accident damages (other than damages to which Part 4 of the Motor Accident Injuries Act 2017 applies) from the employer liable to pay compensation under this Act—
The person ceases to be entitled to any further compensation under this Act in respect of the injury concerned (including compensation claimed but not yet paid), and
The amount of any compensation already paid in respect of the injury concerned is to be deducted from the damages (awarded or otherwise paid as a lump sum) and is to be paid to the person who paid the compensation.
If a person recovers damages to which Part 4 of the Motor Accident Injuries Act 2017applies from the employer liable to pay compensation under this Act—
The person ceases to be entitled to any further compensation under this Act in respect of the injury concerned (including compensation claimed but not yet paid), and
The amount of any of the following compensation already paid in respect of the injury concerned is to be deducted from the damages (awarded or otherwise paid as a lump sum) and is to be paid to the person who paid the compensation– weekly payments of compensation,
(ii) permanent impairment compensation and pain and suffering compensation, but limited to the amount of any damages recovered for non-economic loss.
Damages is defined in section 149 of the 1987 Act as follows:
In this Part–
“damages” includes–
any form of monetary compensation, and
without limiting paragraph (a), any amount paid under a compromise or settlement of a claim for damages (whether or not legal proceedings have been instituted),
but does not include—
(c) compensation under this Act, or
(d) additional or alternative compensation to which Division 8 of Part 3 applies, or
(e) an award of compensation or direction for compensation under Part 2 or Part 4 of the Victims Compensation Act 1996 , or
(f) a sum required or authorised to be paid under a State industrial instrument, or
(g) any sum payable under a superannuation scheme or any life or other insurance policy, or
(h) any amount paid in respect of costs incurred in connection with legal proceedings, or
damages of a class which is excluded by the regulations from this definition.
(2) A reference in this Part to compensation payable under this Act includes a reference to compensation that would be payable under this Act if a claim for that compensation were duly made.
“Damages” has a very broad definition and it is to preclude double compensation.
The employer carries the onus of establishing the defence under section 151A, and must establish that the worker has recovered damages from the employer liable to pay compensation under the 1987 Act in respect of an injury.
Recovery occurs when the person receives a payment of monies, where payment is determined by a deed.
The issue turns on construction of the deed and the terms of legislation. So one must look to the actual language of the deed and what would a reasonable person understand the language of the deed to mean.
If the defence is raised, the commission is required to determine whether the damages recovered pursuant to the deed are for the same injury, the subject of the application for workers compensation.
Even if the deed does not refer to the terms of damages, that is not determinative, given the width of the definition of damages in section 149 of the 1987 Act.
The intention of the parties to the deed is not determinative either because it is the acceptance of money which triggers the operation of section 151A.
So the starting point is, how does someone bring a discrimination cases in NSW?
- The Discrimination Act 1977 (NSW):
- Disputes under this legislation are determined in the NSW Civil and Administrative Tribunal.
- The Racial Discrimination Act, 1975 (Commonwealth), Sex Discrimination Act 1984 (Cth), Disability Discrimination Act 1992 (Cth) and Age Discrimination Act 2004 (Cth)
- Disputes are determined by the Federal Court and normally, first through an application with the Australian Human Rights Commission.
If there has been an application to one of these forums before a workers compensation claim has been brought, and an agreement has been signed for a financial sum, the applicant worker is already in danger from being precluded from both common-law benefits and statutory benefits pursuant to the 1987 Act, the first step one must take is to look at the deed of release signed by the parties subject to any above proceedings.
If a deed of release even indicates that the settlement excludes workers compensation entitlements, that in itself may not be effective to exclude the operations of section 149 and 151 of the 1987 Act, because the deed may covers the exact same as circumstance and material of the workers compensation proceedings and you cannot contract out of the statute.
